Goldman Sachs cuts Apple, predicts 26% stock drop on TV+ accounting

Goldman Sachs just significantly slashed its price target for Apple, predicting 26% downside for the shares because of a “material negative impact” on earnings for the accounting method the iPhone maker will use for an Apple TV+ trial.

“We believe that Apple plans to account for its 1-year trial for TV+ as a ~$60 discount to a combined hardware and services bundle,” wrote Goldman analyst Rod Hall, in a note.

“Effectively, Apple’s method of accounting moves revenue from hardware to Services even though customers do not perceive themselves to be paying for TV+. Though this might appear convenient for Apple’s services revenue line it is equally inconvenient for both apparent hardware ASPs and…